What is a regular IDCW scheme?

I am planning to invest in Mirae Asset Tax Saver Fund for the long term. Is it a good fund? What is the difference between a regular IDCW scheme plan and a regular growth scheme plan?

--- Kishan Jaiswal

Subir Jha, founder, Buckspeak, a financial planning firm based in Hyderabad, responds:

Mirae Asset Tax Saver Fund is a good fund. It has done well since its launch in November 2015. You could also look at funds like DSP Tax Saver, which have a longer track record (November 2006). Regular IDCW is the erstwhile dividend option, wherein a certain portion of your growth is paid out to you as an ‘income’. Under the Growth scheme, the capital keeps growing and you get a bigger benefit from the compounding. I wouldn’t recommend IDCW in an equity fund, since you are trying to draw an income from an instrument, which is best suited for long-term compounding. In case you want a regular income, there are other options to consider.